In a future where everything that can be connected, will be connected, the Internet of Things has the potential to change life as we know it. Robert Tercek, author and digital futurist, discusses the good, the bad, and the awesome of IoT. Join host Reid Jackson as he cracks the code on emerging tech through conversations with thought leaders at the top of the digital disruption game. Reid and the GS1 US innovation team explore the intersection of standards and emerging tech, and how the two together can solve the business problems of the future. The views, information, or opinions expressed during DeCoded by GS1 US podcast series are solely those of the individuals involved and do not necessarily represent those of GS1 US, its employees or member companies. The podcast series is provided by GS1 US as a convenience and does not constitute or imply an endorsement, recommendation, or favoring by GS1 US of any of the identified companies, products, or services. GS1 US does not warrant or guarantee any of the products or services identified here, nor does it assume any legal liability or responsibility with respect to them.
More from Robert: https://roberttercek.com
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About Robert Tercek
Robert Tercek is a pioneer of interactive entertainment and innovative digital services. He has served as a Special Advisor to GS1 US and startup ventures, and he provides strategic insight to Fortune 500 firms including AT&T, IBM, PwC, HPE, Microsoft, Google and government bodies in the US, Canada and Australia. During his 25 year career, he created hit titles for Sony Pictures Entertainment, MTV: Music Television and Oprah Winfrey and he supervised the launch of the world’s first multiplayer games, streaming video on mobile devices, and large-scale live learning platforms. He is in great demand as a keynote speaker on the subject of technology and media trends. He is a fellow of the Royal Society of the Arts and a member of the Academy of Television Arts and Sciences.
Reid Jackson: So on today's show we're going to be talking about IOT, the internet of everything or internet of things. Myself personally, I've heard the term IOT as far back as 1999 with John Chambers of Cisco Systems. But on today's show I'm super excited to have author, speaker, consultant, Robert Tercek with us. Robert, welcome to the show.
Robert Tercek: Hi Reid. Thanks for having me.
Reid Jackson: I'm super excited to be speaking with you today. Robert, you and I, we've spoken at a lot of different meetings, a lot of different events. I've seen you speak at different conferences and such. So I just want to thank you again for being on the show here. I often tell people about your book Vaporized and, I'll tell you, I didn't know about it until we met and somebody told me that you had it, but I read it a while back about a year ago and it's just, it's so spot on. How did you come about to embark on that adventure of writing in the book?
Robert Tercek: You know Reid, I found that I was answering the same questions again and again and again as I was traveling around the world, talking to people and working with clients, working with consulting clients, the same questions kept coming up. And finally one of my clients, CEO of the company, sat me down and he said, "You need a book. I need something I can give to all of my employees, not just have you come in and do a talk or have you come in and do consulting project. I need a version of you that I can give to everybody in my company." And it was that side in mind that that caused me to write the book. And I took everything I had learned about the transformation of mobile telecommunications. And then I projected out a few years. At this point that book's four years old. And I'm gratified to say that it's been a success. And that's really exciting.
Robert Tercek: I mean it was labor of love. It took a long time to write. But the cool thing about it is now everywhere I go in the world, people say to me, "Hey, I've read your book or I gave your book to somebody. I thought it would be really helpful for them." So I appreciate getting that feedback. Thank you.
Reid Jackson: Yeah. Yeah. No, I'll tell you, I mean it is four years old now, but as I tell everyone, you have early adopters, mid adopters and late adopters and this book is still extremely relevant to everyone. So if you're a mid adopter or if you're a late adopter, this is still going to be cutting edge for you. But there's a lot of great things you talk about in the book of going from print to pixels and how television is evolving. I'll tell you, we're getting ready to go to CES and last year when I was at CES meeting with some of the television manufacturers and all the talk around 5G. Cable industry, media, it is really changing. I mean that's not today's topic, but would you agree? I mean it is like violently changing out there.
Robert Tercek: It really is. So the funny part about that is, I've worked in television now for 25 years and when I was writing Vaporized in 2014 and 2015, the conventional wisdom in television at that time was that TV was not going to change. And I spoke to industry analysts who have the data and they were like, "Yeah, the data doesn't indicate that it's going to change as dramatically as you think, Tercek." They would push back against it. And I had an argument with him about it because I said, "Look, based on my own experience, based on my anecdotal discussions with people that I talk to, what I'm hearing is that people are going to migrate the services like Netflix and other streaming video services in mass and it'll start small. And then when they start to do the switch, when it percolates through society, it'll be an unstoppable torrent as people migrated, mass Exodus."
Robert Tercek: Now at the time, conventional wisdom said I was wrong. And I went ahead and wrote about that in my book. Well, it turns out I was right. I wasn't just right. I was super correct. I nailed it. And honestly that was swimming upstream because the conventional wisdom at the time was that TV was going to continue in the exact same form. Now what we're seeing is a Renaissance of television. This is really important point. If people think it's about decline of TV, the decline of cable, somehow the business model is imploding. Those things are somewhat true, but the fact is we're making more TV shows than ever more scripted entertainment than ever before of higher quality, more episodes, better acting, better talent, better directing. It's really astonishing. We're kind of living through a Renaissance of the TV form even as the business model and the old structure of TV is imploding.
Reid Jackson: Yeah, it is. I can tell you personally, my family, cut the cord, five months ago. And I thought I was late to getting to it. There were some trepidation and it was just, some of the things were easy, but since we've done it, I don't think we'll ever go back. But let's move on to the real crux stuff today, which is IOT. But with IOT there's big data because you have lots of connectivity and you have sensors and you have compute, there's analytics, there's artificial intelligence, there's so many different layers about this. And as I stated before, I started hearing about IT right around the new millennia with 2001, 2000 and toasters are connected and the whole roll back then. But it was early conversations but now we hear it all the time. But my question to you is, is it real? Are we seeing mega adoption? Are there other things that need to happen before we see mega adoption? Just kind of give me your landscape of this.
Robert Tercek: Sure thing. So the first question yes is, is it real? The answer is for sure. The internet of things is real. It's really happening right now. It's happening at lots and lots of subtle ways that we don't notice. But it's certainly happening. By that I mean more and more things are being connected to the network. More and more devices that were offline are now becoming devices that are online and as you point out, as soon as you connect something to the network, it starts to tell us something about itself. It starts to transmit data and our data assets are growing. So the first answer is for sure it's a real thing. The second answer though is that it's going to continue to grow. We're still at the early stages. Now it's true. Reid, you heard about this 20 years ago. That's definitely true.
Robert Tercek: I recall hearing about that internet fridge in the 1990s. And at the time it was a bit of a joke. I mean it was like a punchline, "The Internet's big who needs it? what's the point? We can't even get our computers to stay online. How is that going to work?"
Reid Jackson: Yeah.
Robert Tercek: Okay, so that shows you that the ideas themselves are not necessarily do, and even the technical architecture is a vision of how that might unfold. That's not necessarily new. What's behind that is, it takes two fundamental things to connect stuff. The first one is microprocessors and as everybody knows, as the cost of micro processor keeps dropping, the power keeps going up. This is Moore's law. It's been held steady for 30 years or more, continues to eke out some performance improvements every single year. And so the point is the cost of putting processing power in a device has dropped tremendously and that's one of the things that makes it possible, but you can't rush that process. That is a stately process. It does happen on a predictable schedule every two years, but it doesn't happen faster than that.
Robert Tercek: So even though we had the idea back in the '90s, we had to wait until now when the cost of the processors drop. The second point is connectivity. The right network has to come along and we're just now at the brink of having the right kind of network, we use these high speed always on low latency networks. You hear a lot about 5G these days. That's not the only way to connect things to the network. That's not the only way to build an IOT network. A lot of people are using super low cost networks like in LoRa or Sigfox that they can set up on their own. They don't need to go through a Teleco. You're starting to see kind of a boom there even before 5G rolls out. The point there is that we're just at the brink of having the right kinds of networks to connect everything. So I think you're going to see this grow and grow and grow in the next 10 years.
Reid Jackson: Yeah. You bring up some excellent points about, LoRa and other connectivity options that corporations have. I think, the everyday person thinks of IOT is kind of like a smart city or the connected home. And just on the news last night they were talking about, the Ring suite of products that are out there, the famous Ring Doorbell with the video capture and everything. But they've moved on to other things and there was a, I don't know if she was nine, a nine year old girl that was in her bedroom and somebody had hacked into it. So, I think that that's another aspect that people, it's like, "Well you know IOT is real but it's not widespread. It's kind of like a little pocket here, a little pocket there. These guys are using it for this or that." But what you're saying is that IOT is not going to be pocketed. It's going to be all encompassing?
Robert Tercek: It will be. Well so when we say connecting everything is the theme of the internet of things. We really mean that quite literally, everything that can be connected will be connected. And this is a super interesting thing to think about, right? Because you go, okay it's pretty easy for me to see how say my television can be connected because the TV is not really that different from a computer. And by extension you go, "Okay well then can a stereo be connected?" Sure it can. And bear in mind, this is not a small thing. Those Alexa speakers that you can talk to, tens of millions of people have those and use them every single day. And people are now in the habit of saying, "Okay, Google, what time is it?" Or, "Hey Alexa, can you set an alarm or something?" Of course, as soon as they say that, you're going to hear the Alexa go on in the background of my house because I do have Alexa listening all the time in the background.
Robert Tercek: So once you have one of those devices in your house that you can talk to and you start to develop that habit, that is a learning curve. Not everybody's gone over that learning curve. What's interesting is the people that have, when you visit their houses, they're talking to Alexa or Google all the time, right? It becomes a very essential habit because your voice is the longest arm that you've got, right? So it's easier to speak to a device that's listening than to reach for the phone in your pocket or God forbid, go over to the computer and turn that on and connect to the Internet. If you're just asking about a recipe or setting a timer or asking about the weather.
Robert Tercek: Once we have that habit, the next step is that we start to connect that device to other devices and the company is by far in the forefront of this is Amazon. They've done a brilliant job of adding skills to Alexa and you now have tens of thousands of skills. That is to say your Alexa can connect a lots and lots of other things in your home and start to automate more functions inside the home. Now Reid, right now we're talking about IOT in the home, connected home. And what I'm trying to say to you is that a significant percentage of American homes are already connected in some part and that'll grow.
Reid Jackson: I would agree with that.
Robert Tercek: But by significant percentage is it 10%, is it a 20%. I don't really know. It's not half yet of course, but again, the cost of these things keeps going down. The amount of connectivity, the networks we have keep going up and so gradually more and more people are going to start to connect things in their home. Once it's in your home, once you've got that device, a smart device you can talk to in your home, then your next step is to start to connect to other things together. This is going to take 10 years before it's like ubiquitous, but it is clearly going to come. That's just the connected home. That's a microcosm. The much bigger story that most people don't see and are never going to be aware of is industry. The idea of the connected industry, which could be a physical factory, it could be a whole supply chain that spans the globe.
Robert Tercek: Here there's tremendous opportunity and most of it is unrealized. We're still at the very, very beginning of connecting that global supply chain. And Reid, you know from our other discussions at GS1 how important this is and how central role digital identity is going to play in that transformation.
Reid Jackson: Yeah. I'm glad you bring that up. I, I want to talk about that in a little bit further down a program here, specifically about decentralized identification and the connected digital twin. But let's just round out this part of our conversation here with, it's coming. You said it's coming in 10 years. What are some of the challenges that we have to overcome? So where this will be adopted and I see it being adopted. I mean, some of these questions we're posing here just to kind of help us frame out right there. We would call them lay up questions, but just to kind of frame out for all of us to get onto the same page. But I see it, I mean, I've seen this tsunami of digital analytics coming for a long time and it grows exponentially. I've seen the connectivity, I was working for Cisco back in the '90s when people still thought it was the food beverage company. And yeah, it's not the SYS I'm with the CIS.
Reid Jackson: But I see this happening and at some points I'm like, "Man, this is going to be Nirvana. It's going to be amazing. It's going to be so much safer, so much better, so much quicker." And then on the flip side, I see it as being terrifying. It's connected, it's not as secure. Countries are going to be able to block out other countries. People are going to be able to be digitally wiped off the map and controlled. Kind of some of these horror Sci-Fi movies we've seen in the past. So, what are some of the challenges that you're seeing from an industry to get to this ubiquitous adoption and some things we should be concerned about as we go along our journey?
Robert Tercek: Okay, that's a great set of questions. It's actually two different kinds of questions. The first one is what are the challenges or why is there such a long timeline? That's question number one and question number two is what about that dark scenario that you've shared?
Reid Jackson: Exactly.
Robert Tercek: So I'll get to that in a second, but first let's tackle the first one. Okay. So the first one is what are the challenges? Now, as you pointed out, this idea is not new, right? It's been around since the '90s and actually I'd argue it started even earlier than that. I'll give you an example then, just a second here. Here's one of the point I'm trying to make when we talk about the internet of things, it's not like one thing, it's not like you're buying a computer or a modem.
Reid Jackson: Right.
Robert Tercek: We're talking about a whole system and actually it's a system of systems. And let me take a minute to explain what I mean by that. So when I say this idea of ubiquitous connectivity is not new, do you remember the fax machine?
Reid Jackson: Oh yeah.
Robert Tercek: Here's a little technology history segment for our listeners. So the fax machine. As the old joke goes, one fax machine has no value whatsoever. But then as you start to connect more and more fax machines, the value of all of them goes up that's Metcalfe's law, right? You actually double the value of the network you have every time you add another device. Okay. So that principle was born out in the 1980s and the fax machines, the original fax machines were expensive and hard to get to. They were industrial use only. FedEx had a service called Zap Mail in the early 1980s where you could send a letter when it had to get to that day and what they were really doing was you go to a FedEx place and they would scan it and fax it to another location across the country and then the messenger would run the thing over to the bottom. That was back when we still had bicycle messengers.
Robert Tercek: Of course that got replaced very quickly, immediately when people could buy their own fax machines. It started with companies, but I remember really clearly in the 1980s, 1986, I was a freelancer in the film business in New York and people started asking me if I had a fax machine and I finally had to go buy one and the price of the fax machines was dropping so fast. Now a little fax machine for your home cost, maybe 250 bucks, which in retrospect is a joke. Now it's a part, right? It's a piece of software we vaporized it.
Reid Jackson: That's right.
Robert Tercek: But back then that was like it put it in range and I could start getting storyboards and scripts and gigs fax to me, and it got to be quite normal to ask someone what their fax number was. Most people had that on their business card. Weirdly, now, even today, most of our medical offices still use fax machines and they still have people who still use fax.
Reid Jackson: Yeah. It's a requirement.
Robert Tercek: Today people are like, "What's a fax machine? It's ancient history." But the point there is that it took time to diffuse the fax machine through the entire economy, right? It took about a decade and in the 1990s fax machines were the Zenith in the beginning of the '90s because this was before we had real internet, widespread adoption of internet, and then it was still something that was used in academia, in the military and government. So in the 1990s, we realized that the fax machine on its own is just one piece of what is a multi-part system. You need fax machines, which means you need good quality scanning at an affordable price point, right? So you can see the analogy to the computer chip there. You need good quality processing at affordable price points. So the fact that she got a good quality scan at affordable prices, but you also need a telecommunication network to do the transmission. All right.
Robert Tercek: So a lot of people had to get a second phone line installed that took time for everybody to get an extra phone lines installed. I remember working in offices where we'd have a bank of fax machines, so you'd have to get six or seven phone lines installed. And then of course you also needed things like thermal paper and there was a lot of competition who could make the right kinds of thermal paper. I know all this is like ancient history. Now-
Reid Jackson: Remember the paper that would roll up.
Robert Tercek: Yep, exactly. That curly paper.
Reid Jackson: Roll up. Yeah.
Robert Tercek: You got it. And then it took a little while for like inkjet and laser printers to be combined with fax machines. Right? That happened a little bit later, later than most people think. That was in the 1990s. Previous to that, it was thermal paper rolls. And anyway, and then of course you needed a secure room because sometimes people were sending contracts or other confidential stuff through and you didn't want they're just piling up in the stack of faxes that would come through. And so you need a special place. So the point I'm making is simple. It took a decade for all of that to be reconfigured inside of companies and inside of people's homes. And then of course the funny thing is the internet comes along, in the next decade and wipes out all of that and makes it irrelevant and we took another decade to reconfigure everything for dial up. And then in the two thousands we did another decade of re-configuring everything for broadband and then 2010s we reconfigured everything for mobile.
Robert Tercek: So what you're starting to see is that this is a never ending process. This is a never ending process. We're going to continue to make incremental upgrades every single year to our network devices. We're going to continue to push out more connectivity to more and more devices. We're going to continue to find ways to cut costs and give us better processing power at the very, very edge in each of these devices. Find more ways to connect those devices on the edge together. Get to talk to each other. This will never stop. So when I give you a 10 year timeline, it's not really 10 years. It's an arbitrary number. The point is, it's going to be this way forever.
Reid Jackson: Right. Right.
Robert Tercek: Any company that is embarking on its digital journey right now-
Reid Jackson: Socialization adoption.
Robert Tercek: Yes. Any company that's in the process of doing this right now, they need to understand that as they move to becoming a cloud native company and they move to embrace internet of things, industrial internet of things or internet of things for the residential, to their consumer, this process will never end. They're never done. There's never a point when we plant the flag and say, "There we did it, internet of thing. Okay, onto the next project." It's like, no, this is baseline forever. Every company will be doing this type of digital transformation forever. And it's final note on that. So I talked a lot about the stack of systems that you needed to make the facts work. Let's just take a second and look at all the things you need in place to make the internet of things work. Right?
Robert Tercek: So back in 2013 the searches on IOT or internet of things peak, that was the all time peak on Google when people were searching for the [inaudible 00:19:35]. You could say that's like a good proxy for, when maximum awareness people were most curious like, "What is the internet of things?" Around 2013. Thanks to the efforts of companies like Cisco, your firm, right? They were pushing this idea so much. People started to asking questions. You have to Google what the heck it was. Okay. So right around that time we were in the middle of a gigantic sweeping transformation the past 10 years, not just the smartphone decade, which I've talked about, written about a lot, but also the cloud transformation. So consider all the component parts that you need to make the internet of things work.
Robert Tercek: When we think of internet of things, most people think about devices, a tablet or maybe a smart speaker or something else that's a device that's got power and it's got a processor and it's got network connectivity. So basically it's like a phone or a computer embedded in another product. Okay, that's important. There's tens of billions of those things connected to the internet now about 40 billion by some counts. Okay. We know that number will go up to hundreds of billions for sure, but if we define internet of things as just devices that are smart and connected and have power, we're actually defining the opportunity too small. That's too narrow. That's an important piece. But it's just one piece.
Robert Tercek: Here's what else you need to make the internet of things work. In addition to devices, of course you need the networks. I spoke about that a minute ago and then you extend that network with sensors on the edge. And when we talk about sensors, you have to envision trillions of sensors, not millions, trillions of sensors. Sensors built into road, sensors built into building, sensors built into hospitals, sensors in schools, sensors in the city, sensors all around us, even inside of our bodies as nuts as that sounds. This is the project for the next 10 years is putting all these sensor networks in place. Now those sensors connects through the network to the cloud. The cloud has been going through this massive transformation for the last 10 years. We tend to think of the cloud is like one thing. Most people don't think about it at all. It's pretty abstract.
Robert Tercek: But remember 10 years ago, in 2008, we had the first public cloud available from AWS. It's gone through a massive transformation itself since then.
Reid Jackson: Oh, yeah.
Robert Tercek: We've gone from public clouds to private cloud to hybrid cloud and then people got concerned that Amazon or Google had all their data. So then they wanted to like find a way to move out. So we got the containerization, virtualization that gives us multi-cloud, the ability to move from one cloud to another without any trouble instantaneously. So the cloud itself has been going through this big evolution and it'll continue it. Now everyone's talking about edge computing.
Reid Jackson: Yep.
Robert Tercek: It's pushing the part right out to the edge with 5G. You hear that all the time, right? That's another reshaping of the cloud. So cloud has changed the way we do compute. Cloud has given us this new architecture for software called micro services whereby you can have an always on service and you can be changing one part or another, but the service is still going. You have to take the whole thing down. Gigantic revolution in how we develop software that's not all, cloud is also changing the way we do marketing and sales. So it's actually transforming companies. When we talk about Agile, that used to be about development teams and IT, now Agile is like the whole company and when we talk about cloud native, that's what this is. So the IOT is starting to reshape the way companies operate and the way companies are organized.
Robert Tercek: And that's not all. You also have to think about what's on top of all those devices and networks and cloud computers. Well those are digital services. Now, these are evolving super fast and you know from my writing and my talks, I'm very focused on digital services, so those digital services, they're dynamic services, are constantly gathering data, huge amounts of data. The amount of data that we have today is 40 times greater than the amount we had 10 years ago. There's been a 40 fold increase in the amount of data that we generate, and that's nothing. That's nothing. It's going to double and double in the next five years, so we're going to get up to 175 zettabytes of data generated each year by 2025.
Robert Tercek: Now those data assets are so gigantic. There're so enormous that 10 years ago they began to outstrip human capacity for comprehension. That's why we need artificial intelligence, cognitive computing, machine learning. That's how we master these gigantic data assets that we've got. We've got these huge, what they used to call data lakes. Now they're calling data oceans. Because companies are a wash in data. Much of that data is dark and much of the companies even understand what's in it or how to use it. That's why we need artificial intelligence. So when we talk about the internet of things, we're not just talking devices, we're also talking sensor networks. We're talking advanced high speed networks. We're talking about all those sensors and devices talking to cloud computing, delivering dynamic services that generate gigantic datasets and artificial intelligence to process and manage that data. That's the full stack.
Robert Tercek: Now Reid as you can tell from my enthusiasm, I see this as a big opportunity because honestly those pieces have only recently converged in the last few years. Those pieces have gotten mature enough and stable enough for them to fit together and that's why we're right at the brink of the internet of things. I think we're just at the beginning, we're in the low foothills and we're starting to see the mountains ahead that we're going to go through in the future and I believe this is a never ending process. This is what's going to define being in business for the next 100 years.
Reid Jackson: Yeah, I couldn't agree more with you and I love your passion. I always love talking with you or listening to you present on stage. It's always energizing. And I just can't thank you enough for your passion. When I look at the IOT space, I think you bring up an excellent point of it's a journey. It's not a destination, right? It's always ongoing. There's things that are happening early, mid and late. There's convergence of technologies, there's convergence of services and offerings and even legislation that helps move some things around. But you know what's funny here is, we sit in the United States and I've worked in the United States, you've traveled the globe. I've traveled the globe, been very blessed and fortunate enough to have those opportunities.
Reid Jackson: One thing that surprises a lot of people when I talk to them is how other countries are actually much more advanced in some of the stuff. When you go to China and when you go to South Korea and other areas, you start to see how they're actually more connected than we are in a lot of ways. And you actually experienced this. We talked about this one time. I remember, because I had a sister who was living in Switzerland and I went over to visit her and she's like, "Hold on, let me text my husband." And I'm like, "What's that?" And she goes, "I'm just texting him." And I was like a techie, gadget freak at the time. And I'm like, "What's a text?" Would you explain to me what this text is?" And she was going through it where you had to hit, like two, three times to get to the letter C, three times, to get to let her C and go through that. And I'm like, "Wow, we don't even have that back in United States."
Reid Jackson: So talk a little bit about that. We're seeing this with other countries and nations that are actually ahead of us in some of these aspects.
Robert Tercek: Well, there's a great quote from William Gibson, the science fiction writer who said, "The future is already here, it's just unevenly distributed."
Reid Jackson: Oh yeah.
Robert Tercek: And it's definitely true. When you travel to places like Asia, you start to see glimpses of the future. And you wonder, is that our future? Are we going to have a similar one or maybe ours will be a little different." So technology unfolds in different ways in different places. It has a lot to do with what's available, so like kind of the legacy network that's there. Sometimes you work with it, sometimes you upgrade it, sometimes you work around it. And then also it has to do with people's proclivity and how do they live. One of the reasons Japan was at the forefront of mobile innovation back in the late 90s is because people didn't spend a lot of time in their homes. Americans have nice big houses with like a deck and then the living room. We have a lot of gadgets in our house and frankly it's quite nice to go home unless you live in a city like New York where everybody's living in smaller apartments.
Robert Tercek: Most American homes are pretty generous inside, so they're fun to be in. That's not the case in Japan. Most people spend their time outside at a cafe traveling around and so mobile was super important. And so that whole culture adopted mobile much, much earlier. So people adopt different things in different rates. You're totally correct about China, China has leapfrogged ahead of the United States. I don't think most Americans are aware of this. I think it's kind of troubling that we're not. Generally the news, you hear about China's that somehow China is a threat or it's evil or whatever. I'm a little skeptical about that. There's no question that China is an adversary to the United States in some respects. They're also our biggest trading partner. So that story isn't 100% accurate.
Reid Jackson: Yeah. That's right.
Robert Tercek: But what we should be aware of is that China has leapfrogged us in many respects in terms of the deployment of technologies, most certainly with artificial intelligence, there's been a surge. China has adopted this as a national mandate and there has been a surge of investment and innovation in artificial intelligence. And of course Chinese people have adopted mobile devices in gigantic numbers. So they have large data sets, which means that they can train their machine learning algorithms in China on much bigger data sets than we have in the United States. In fact, they can point to where things like Google TensorFlow will break at a certain scale because the United States doesn't have that level of scale. And so in some respects they're ahead. One place China is ahead Americans need to be aware of I think is in the 5G deployment.
Robert Tercek: We hear a lot of news about trade war and some sanctions. We're trying to shut down companies like Huawei or ZTE, Chinese telecom technology providers. But what's behind that story is that China has made great strides in deploying 5G. They're very serious about being a world leader in the next generation of mobile telecommunication where the United States has barely started to deploy, and you here our big network operated AT&T and Verizon talk about how they're rolling out 5G. But when you peel back a few layers, you discover that they've deployed a few thousand cell sites. Nothing, right? That's something, but it's still very much a test deployment. So if you had a 5G phone in the United States right now, good luck finding a network, right? Most places, there's no coverage and it will be years before there's sufficient coverage.
Robert Tercek: But in China, that's not true. In China, they have at least 10 times and possibly 20 times as many cell sites deployed for 5G. So it's a real thing today that consumers can really access in big cities in China. That's a gigantic advantage for companies like Huawei because they're going to soon be able to sell that technology, proven technology that work at scale. They'll be able to sell that around the world. And you can see that in the progress that Huawei is making in places like Africa and the subcontinent and other parts of the Southern Hemisphere, they're making tremendous strides there and they're putting tremendous pressure on the American networking companies and the American companies that sell telecom, telecom equipment, because we simply don't have the experience. We haven't deployed 5G at scale yet.
Reid Jackson: Yeah.
Robert Tercek: So it's pretty true that China's way ahead. Hey Reid, I want to remind you, we don't want also forget that other question that's hanging out there about the security issues, so let's not forget to go back to that. That scary security drama.
Reid Jackson: Yeah. Yeah. I mean, well let's just keep talking about China. I mean, China's connected and about the scariness. I mean, there's so many positive things. I mean, they use computer vision like nobody else does right now. They have images of every person in the country and can identify him at multiple different angles and that's great. You can walk in, pay for things with your face, right? I mean, I have an iPhone and it unlocks with my face, which is nice and easy and you don't have to remember so many things. But there's the flip side of that, right? There's the Sci-Fi evil side of it, which is-
Robert Tercek: The dystopian vision.
Reid Jackson: Yeah. Yeah.
Robert Tercek: Yeah. I hear you. So it's surveillance society. There's a lot of hoopla about that topic right now. Again, I wrote about that in depth in my book, so I'm familiar with the topic. I'm familiar with the concern. Here's my thought though for you. Here's a little thought experiment. Ask yourself, where did you get this information about China?
Reid Jackson: Yeah. That's right.
Robert Tercek: Who gives you that information?
Reid Jackson: Okay.
Robert Tercek: Where did you get this impression from? Right? Because there seems to me to be an awful lot of news in the United States about how China is doing surveillance society. You hear about things like the social credit score, right?
Reid Jackson: Yeah, yeah, yeah. And let me just, I want to go on the record. I want to go on the record though. China was what the topic we were talking about. I'm fearful that that is exactly what's going to happen here in the United States. I've seen some of these, Jason Bourne type movies and stuff.
Robert Tercek: Reid we're already there. We're already there. No, it's a giant distraction campaign. And I'm not trying to be conspiratorial here. I don't think it's a campaign. It's orchestra, but it seems to be like kind of in our patriotic narrative to compare the United States and everybody else and always say that we're somehow better. Right?
Reid Jackson: Right. Exactly.
Robert Tercek: We're somehow different. Okay. We're the land of the free. But the reality is that we've been living in surveillance society since at least 2010. And all those things you consider about China-
Reid Jackson: And even before and FBI, all of that.
Robert Tercek: Well, sure. Okay. But even, okay, sure. But I'm not even going to go there. Right. Like that was getting into like a political discussion. I'm just saying, every time you read a headline that tells you about some scary thing in China, ask yourself is the same thing happening here?
Reid Jackson: Happening here. Yeah. That's a great point.
Robert Tercek: Chances are it's already a fact in the United States.
Reid Jackson: Yeah.
Robert Tercek: So we hear a lot about, for instance, you'll hear a lot about how, "Well the Chinese government gets all the information from private enterprise. Like WeChat is sharing all this data." Okay. Do you remember about six years ago when it was revealed that Verizon and AT&T allowed the NSA to tap into all of the major switchboards, all of the major connections in the United States to gather all the data. Wholesale downloading of digital data is something that's been going on in this country for about a decade.
Reid Jackson: See this is why love talking to you.
Robert Tercek: And I'm not trying to get in the middle of the cat fight-
Reid Jackson: No. No. So this is why I love talking to you.
Robert Tercek: I'm not interested in the political cat fight, the trade war. Well, and also it's just like wake up. Like people be aware that you might be getting programmed when you're reading the news to believe a narrative that somehow posses China as a villain in all of this. When I think what China is doing, they're doing what every country that can is doing. I believe that every country that can surveil its citizens is doing it. And I don't think it's negative. I don't think it's dystopia. Countries have legitimate concerns about espionage. They have legitimate concerns about organized crime. They have legitimate concerns about terrorism. These are facts of the world that we live in. And we could talk about how terrible those things are. Those are facts. So there are people in each government who are tasked with a very difficult job of finding the bad guys.
Robert Tercek: And one of the tools at their disposal is to listen in on conversations. And we have to trust our civil servants are generally doing a good job. And there's lots of, stories to the contrary. I read all that, I'm aware of that. There's a lot of pitfalls. I get all that. But the fact is, we're safer today than we've ever been in history.
Reid Jackson: I would agree with that wholeheartedly. Everyone always says, "Oh my gosh, we're going to, where in a handbag and everything's falling apart." But if you really look back at history across the globe, we're in so many better places, in terms of economy, opportunities. I mean like, education is the foundation of all success and access to information is unprecedented right now. So you make an excellent point. There's always, there's good with bad, there's light with dark, there's hot with cold. We were always going to have to balance it and be conscious of it.
Robert Tercek: Now here's the way I think about this stuff. Let me offer this idea because I want to talk about that security thing you raised. It's a valid point. It's a valid concern. Every time you add another device to your network at home, whether it's a smart light bulb or a smart door lock or a smart speaker or a smart TV or whatever. What you're doing is you're broadening the attack surface for someone who wants to be an intruder in your network, you actually make it easier for an intruder to get into your home network. So we all have to be a little bit responsible here, in a way we're all in the Wild West and there's nobody's going to protect you. There's no government that's going to protect you, doesn't matter what country you're in. Everybody who can listen in is going to use these networks to try to listen in. So we talked about government. That's scary. I get it. That's a big brother concern. But candidly, the really bad stuff that's happening right now isn't necessarily coming from governments. It's coming from hackers, malicious hackers.
Reid Jackson: Yeah. The malicious hackers.
Robert Tercek: People that just want to mess with you. They just want to mess with you. It's like you said, the baby monitor, where some hackers get in and they can like taunt a family who has a baby monitor. Okay, that's creepy and weird. Okay. But there's also organized crime and often organized crime goes with terrorism. They go hand in hand. Organized crime is using hacking to get the resources to fund global terrorism. And one of the reasons the United States government and other governments are listening in on these networks is they're trying to trace that activity. So we worry about big brother, we worry about countries like China and surveillance society. The fact is they have legitimate concerns and in many cases what national governments are trying to do is protect their citizens. Sometimes they do it in a clumsy fashion, sometimes they overdo it, right? Sometimes they do get intrusive, maybe pay attention to stuff they should not. I hear about all those stories. I'm aware of all that. But the fact is, most of the motivation is to protect the citizen from what are genuinely truly evils that are out there.
Robert Tercek: I'm just trying to put this back in perspective because I see the hysteria in the news all the time and often I roll my eyes when I read these headlines because I think it's just so overblown. The next time you see a story that's scary about China and surveillance society. Ask yourself, "Do I live in that society? Is that already happening here?" And secondly, "What's the motivation? Why is that the case? Is this actually a good thing maybe? Even though it sounds like a scary story, but the motivation for doing that to protect me from something even worse.
Reid Jackson: When I tell folks, let's shift onto this last topic I wanted to cover today, but what I tell folks is when you're adding something to your home that's electronic, think of it as installing a window that's open. And so, like when you're going to leave your house for a vacation, you want to make sure that it's locked and your alarms on and your neighbors know that you're not going to be home. And so it's like when you, connect something, whether it's a smart speaker or a camera or any of these connected devices, you have to think of them as they're being installed as open windows and just make yourself a little bit smarter about, the administration of those devices in your homes.
Reid Jackson: So let's move on here. Let's move on just a little bit. So, GS1 is one of the largest identification companies in the world that not a lot of people know about. I mean, we identify companies, we identify things and locations. We've been in supply chain for 45 plus years. We're used to over six billion times a day around the globe. How do you see IOT and GS1 standards kind of interacting?
Robert Tercek: Sure thing. That's a great question. So when you talk being used six billion times a day, what you're really meaning or referring to there is that, that GS1 barcode scanner, the UPC barcode is scanned six billion times a day at the point of sale. So it's really important, right? Because it's something we take for granted. People that are numb to this, we don't even think about how easy it is to check out now because someone just scans all your stuff with that infrared barcode scanner. I can still remember the day when cash registers were manual and people had to tally up the numbers and the each person had to read very carefully and check to make sure that there wasn't a typo. They didn't type an eight instead of three and overcharge you for groceries in the grocery store.
Robert Tercek: So the lines were super long in the grocery store and that was the Genesis back 45 years ago when the UPC barcode was introduced. That's an incredibly durable standard. GS1 has been managing and growing that standard. Today you call it the global language of commerce because all manufacturers in the world, more than a million companies use those GS1 standards to manage all the shipping, all their products around the world, the distribution, the marketing, the retailing of all those products in the world are glued together by this data standard. But what's extraordinary about that data standard is though machines can scan it, the machines don't understand it, there's been a gap.
Reid Jackson: Right. Right.
Robert Tercek: And the new standards, the new GS1 Standard, particularly digital link, which I'm excited about, is going to change that because it's machine readable, meaning that machines will actually be able to read those things and understand what they are. They'll be able to fetch associated metadata. So that invisible cloud of data that surrounds every product, even a product that's not connected like a physical item, like a can of beans or a pack of cigarettes or a car tire. There's a lot of information at a product like that, but we tend not to think about it because it's not a connected thing, right? It's not considered part of the internet of things.
Robert Tercek: And so what I see exciting about GS1 in particular Digital Link, is that beyond this world of devices and sensors and networks and all those cloud services that I was talking about just a moment ago, beyond that, there's an even bigger field, bigger in the sense of trillions and trillions and trillions of items that can't be connected because they don't have network connectivity. They don't have a microprocessor, they're not smart devices, they're dumb products. And I call it the internet of dumb things. And I say that lovingly because I see that as a gigantic opportunity. You could figure out a way to connect the dumb things to the smart networks. Suddenly we have data on an epic scale and that's the problem GS1 is trying to solve. That's what's so interesting about GS1.
Robert Tercek: It's funny, we don't tend to think of a standards body as interesting or exciting, but I see that as tremendous opportunity. It's like a giant snow field. It's like we've been climbing in the mountains and we just discovered this huge expanse of snow and there was no footprints at all. And you and I Reid are going like, "Let's go check this out." Because literally now you can start to connect everything in the world and trace it with this new barcode standard called Digital Link. So there's a tremendous opportunity to expand the internet of things. I use that word tremendous a lot because it's, I can't think of a better way to describe it. It's both awesome and it scale trillions and trillions and trillions. But it's also tremendous in the sense that this is going to be fun. Everybody's worried about like what happens when the robots take over all of our jobs and so on.
Robert Tercek: My feeling is if your job can be done by a robot, let the robot do it. There's so much better and more interesting challenges out there as we try to figure out how to detect all those things that can't be connected but we can still detect them. We can still use digital identity to trace and track all those items and start to understand where those things came from, where they're going next, how long they've been in transit, how were they handled, where the cool things kept cool, or do they overheat? Where the things they're supposed to not get cold, were they kept warm enough? Where would they store it? How long were they stored? What were the ingredients inside of it? Who made those ingredients? Where did they come from? There's so many questions that we have about the products that we use every single day, the food that we consume, the clothes that we wear, and yet today, most of those questions cannot be answered.
Robert Tercek: With Digital Link, bringing all that metadata together with the physical item, with digital link, we can start to answer those questions and I see that as a tremendous growth opportunity. I'm super enthusiastic about this.
Reid Jackson: Yeah, I agree with you. I'm excited to be here at GS1. We're really not a technology company. We're a governing body that services the standards that we bring industry players together to create what's going to be best for all of them. A lot of folks are like, "You guys make the barcode." I'm like, well technically we don't make the barcode. We help develop the standard, the information that sits within that barcode. Because you can have barcodes that aren't using GS1 Standards. But it's interesting because when you start to really look at like, again this week in the news, recall of more lettuce that has E. coli. So these suppliers, they have to go back and pull everything off the shelf. And when I think of IOT, as you just stated before.
Reid Jackson: I think of IOT as sensors. They could be dumb but connected to a smart environment. And then the smart environment is taking these digital reads. So you have cold chain, you have all of these different things that where we can grab more data. And so in the digital world, there's actually more data to be analyzed than we have in our, what I would call my human world, right? So I walked through my house and I look at my thermostat and it tells me, the room is 68 degrees. But the reality, if I had like 17 sensors around the house that were, just simple little sensors, it would tell me, yeah, it's 68 degrees over here, but it's 63 over there and it's 78 in this room. And 78 is four degrees above where the product, should be. So we'll have better care of product, more efficiencies. I really see the two of them just coming together. Just so seamlessly I say that in tongue-in-cheek because business is always difficult with getting systems to talk to one another.
Reid Jackson: But I really see IOT and the use of standards, really coming along. But then that also ties back to, my identity, right? I think of two scenarios, right? There's the robotic side of things and the automation and we are already seeing it. If you live in Arizona, you probably seen a couple of, 18 wheelers hauling down the highway with no driver behind the seat that is happening to today and they're carrying cargo and doing all that. But then there's the consumer side and this is where I see this happening within the next five years easily is, you and I, we both travel a lot. You go to a hotel, some hotels are great, some hotels are just a room and a bed. But sometimes you get to a hotel and you're like, "Oh my gosh, these sheets or these towels or this bed is amazing." And there happens to be an Alexa in the room and it's Alexa order breakfast or Alexa, buy me these sheets and have them sent to my house.
Reid Jackson: All of that has to have some understanding of IOT connectivity and authentication with IDs and my personal person. So I don't know if you want to comment on that. I kind of rambled there for you. But you get me so excited, Robert, about talking about all these things. We could spend hours doing this.
Robert Tercek: It's a conversation. I agree with you on all of that. And I think there's one more piece to the puzzle. Just one more small piece, which is, why should you have to be conscious of any of this stuff? Because if the systems are truly intelligent, if there's an artificial intelligence that's really working in the background, it should be able to track all those hotspots and coldspots in your home and to make the appropriate adjustments. And all you get is a report that tells you it did that. You don't have to actually go around your house and measure those things yourself. So I think as I mentioned earlier, it's the system assistance, right? The internet of things. We now have as many devices that we can possibly network. They're going to all get network, right?
Robert Tercek: So that's a gigantic opportunity. And then on top of that we're going to have the evolution of the cloud and pushing intelligence right out to the edge that we'll have smarter and smarter services delivered right at the edge. Gathering all this data. There are three pieces that I think are going to become in the next decade that are really going to transform this or kind of kick it into overdress. The first one is a new form of artificial intelligence that doesn't exist. The generalized form of artificial intelligence that can be a little bit more aware. Right now we have very narrow applications of AI. I think we'll start to see those drawn and generalized. The second one is the use of blockchain and smart contracts so that automated systems, artificial intelligence can transact between each other using smart contracts.
Robert Tercek: And the third piece already exists. The third piece is secure digital identity and for products, GS1 already provides that. Which means that once we get artificial intelligence that's smart enough to transact with other systems, those systems will be able to use the blockchain and smart contracts to transact automatically without us having to manage it or check it or whatever. We want the smart contract so that we can audit it and see what's been done. So the humans can govern these systems. We don't want to lose control of the systems. But the good piece is that the digital identity that already exists, the standard for that is already been defined. Folks that work like you do the standards bodies, they have to be thinking 10 years down the road because when you write a standard innovation on that standard ceases, right? Innovation moves someplace else. It's like we all agree that's the standard. Okay, we're all going to work towards that standard. So you can't keep innovating on that standard. It takes forever to change the standard. It takes years to do that.
Robert Tercek: So what happens is industry says, "Okay, we all agree on that thing, now let's go innovate around that thing." And so I think you're going to start to see innovation occur around digital identity now that that standard's been set. And to me, that's quite interesting, right? That's like we have a piece of the puzzle. We have an insight. We're like detectives and that's one of our clues. We already know that piece is fixed, so now what kind of innovation can you do around digital identity? For me, right now in my business practice, this is a central part of it. Once we know that something's going to be true for the next 10 years, we can start to imagine things around that. We don't have to guess so much because we have that one piece of information. We know that the standard for digital identity exists and it's going to be widely adopted because a million companies on the planet have already agreed to that.
Robert Tercek: That's a giant clue. For your listeners, think about how digital identity will be the central focus and what kind of innovation will stem from that and you will be on the right path.
Reid Jackson: Yeah. I think that's a fantastic summarization of where we are and where we're going and AI general and AI-S, things that are happening. I mean blockchain and smart contracts, I mean, we are just at the bleeding edge of what's really going to come. We're already seeing it in other areas, secure digital identity is super important as we move through. We didn't even get to this today talking about digital twins, in the representation of the real world and the digital world and vice versa. I mean, a great simple example are the jet engines. They have a digital twin and they're rented to the airlines. But one other thing-
Robert Tercek: Let's do that next time.
Reid Jackson: Yeah, let's-
Robert Tercek: Let's do another one. And I'll join in, we'll talk all about digital twins. I'm crazy about that subject. I would love to.
Reid Jackson: Done. Done. So the only other thing that I would throw out there that I think is helping all of this is open source. I mean, just the sharing ideas, best practices, the good, the bad, the ugly. I mean, open sources really just changed the growth of this digital world that we're living in. But listen that's all the time we have for today. Robert, I want to thank you again. I love talking with you. It's always energizing and you get us thinking about so many things. You bring up so much stuff. So thank you for being on the show.
Robert Tercek: Reid I'm happy to be here. Thanks for having me.
Reid Jackson: I want to remind our listeners, subscribe to the podcast. Please give us some feedback, check out the show notes. I'm going to have some information about Robert in there along with his book Vaporized and some other things that we have going on. And Robert, thank you again for helping us decode IOT.